The chairman’s words before the annual meeting of the National Community Reinvestment Coalition were perhaps most notable for what they left unsaid: At a time of grave concern about a recession that many economists believe has already begun, Mr. Bernanke offered no clues as to whether another cut in interest rates is in the offing when Fed governors convene on Tuesday.
Nor did Mr. Bernanke touch on intensifying fears about the global credit shortage spawned by the unraveling of American mortgage markets. The severity of that crisis was brought home with stunning clarity by the morning’s news that Bear Stearns, the venerable Wall Street investment bank, was leaning on emergency financing from JPMorgan Chase and the New York Federal Reserve.
That news triggered a fierce sell off on Wall Street, where the Dow Jones industrial average was down about 170 points shortly before 1 p.m.
Even before the public distress call from Bear Stearns, markets had already assumed the Fed would drop the federal funds rate by at least half a point and probably three-fourths of a point at next week’s meeting.
http://www.nytimes.c.../14cnd-fed.html
Have a nice day!
Edited by milbank, 14 March 2008 - 04:08 PM.
